Inventor of 'Quantitative Easing' Urges Adoption of Schacht's Recipe To Save the Euro

August 23, 2012 • 7:26AM

Richard Werner, a German-born economist at the University of Southampton, called for a genuine Schachtian plan to save the euro, in an interview with the Aug. 16 Daily Telegraph. Werner is credited for having invented the term "quantitative easing" in 1994, in proposing a money-expansion policy to Japan.

Reporting on Werner's proposal, James Hurley wrote in the Telegraph: "Hitler's central banker, Dr. Hjalmar Schacht, knew how to deal with a Great Depression, Prof. Werner tells us. He argues it's about time we revived his sage economic ideas now.

"Firstly, the plan involves the European Central Bank buying the banking system's bad assets at face value, which Prof. Werner says would not cost taxpayers or cause inflation.

"Instead, they should fund themselves through loan contracts from banks in their countries, which Prof. Werner says would result in cheaper sovereign borrowing.

"All very appealing — but shouldn't we be wary of using ideas favored by the Nazis?

"'If we don't want to adopt economic policies on the basis that they were favored by Hitler's government, which is an understandable viewpoint, then we should not have introduced the euro in the first place,' Prof. Werner responds.

'The introduction of a single European currency, with the central bank located in Germany, was, after all, favored by Hitler and his technocrats.'"